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Fortress Transportation and Infrastructure Investors (FTAI)

Participants
Alan Andreini Investor Relations
Joe Adams Chief Executive Officer
Scott Christopher Chief Financial Officer
Justin Long Stephens
Chris Wetherbee Citi
Devin Ryan JMP Securities
Brandon Oglenski Barclays
Ariel Rosa Bank of America Merrill Lynch
Robert Dodd Raymond James
Robert Salmon Wolfe Research
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the Third Quarter 2018 Fortress Transportation and Infrastructure Investors LLC Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today’s conference, Alan Andreini. begin. may you Sir,

Alan Andreini

would Infrastructure welcome call. third I Fortress to Transportation and quarter like you. you to the Thank XXXX earnings

me Chief Joe and are here Chief Joining Officer Executive Adams, Scott Officer. Financial our our Christopher, today

being to We mode please release our have call note webcast. to if that website, press already and not open you on you encourage this posted have presentation the we done our listen-only investor download an is public and in which so. is Also,

will those we non-GAAP comparable measures the addition, found some In be FAD. financial be directly during discussing including in today, The most supplement. the GAAP can the measures call measures reconciliations earnings of to

statements in future to and statements, the I over made I earnings. call will certain and statements, Before Joe, non-GAAP including materially actual the by differ quarterly be uncertain, you to encourage These forward-looking the are like their review report nature disclaimers to statements regarding review would filed to and measures turn release our from contained today financial risk may point with the results. that in out press factors our regarding presentation and We SEC. investor forward-looking

turn to like over would call I Now, Joe. to the

Joe Adams

will date our shareholder start paid I'm a the share you, XX. and Thank To on Alan. as on pleased XXth to November November based record a XXth dividend be call, of since per dividend $X.XX announce consecutive dividend XX, our company public of inception. The

million was million last compared without in QX QX proceeds and were in million $XX.X $XX.X key $XX.X versus FAD and of FAD or QX funds QX $XX.X in $XX.X Adjusted XXXX Now $XX.X in of year. QX in EBITDA was distribution. metrics QX million XXXX, us and FAD $XX.X to QX sale of of XXXX. million. QX Normalized of million the EBITDA available let's for million discuss of XXXX and in QX numbers. XXXX are of The million million versus for adjusted $XX.X for $XX.X

primarily the million results ports was million slightly number expenses. and infrastructure quarter, corporate. than offset million terminals. $X.X corporate bond quarter from million, equipment in third $XX $XX.X from FAD Corporate number expense, the to and leasing comprised resulting due of negative infrastructure in primarily was prior overall and improved our did from improved $XXX During issuance million from an new business to at lower due the FAD $XX.X by the interest higher QX, The portfolio, we negative increase million our $XX from by September,

turn me Now, let to Aviation first.

Our growth Aviation exceed of Aviation expectations versus profitability. both $XX.X million. our $XX.X business adjusted to EBITDA continues million was for last quarter and

Aviation our best FAD from LOIs approximately quarter. all rate over total QX now million approximately ever. than closing XXXX run million, $XXX annum year per for more bringing additional these investments an the Aviation excluding closed new year, As close investments $XXX of gains expect We such, and since new have million year-to-date September XX our million EBITDA actual record. is on XX. through $XXX approximately a per to two in $XXX last We be And another quarters, million million million our to expect approximately $XX September up QX, in also closed or now next annualized million after sale new we on $XXX to $XXX $XXX

August we because and QX continue the FAD that this so on asset that XX our best QX approximately market on that and to and in with market passenger is about in fleet As In believe up. engine volumes are; engines. of XXX, lease already annum historical us. continue air cargo three the QX of the The currently increased. QX, to aviation passenger expect at on overall we The focus a aviation to are X% strength value, market engine one, revenue EBITDA growth XXX to to best most on should next average. five such we value in have of we older XX% years. in engines market portfolio focus aircraft the at in and the of see higher are tight in closed and reminder on likely rates was which engines by And chosen factors value with grew for in the travel is and our e-commerce own per this are the design the aircraft, miles conditions over Lease global these agrees of air We by growth NG growth we power X% XX% year. year-over-year equipment and XXXX, engines the to creating showed driving the this as opinion, again continued and highly specialize driving we’ve least A-XXX XXX growth the aircraft as the XXX, the the aircraft, X.X% which of per

engines which engines. XXX are their more up first requires numbers on now major spare and A-XXX coming large Second, of shop visit,

maintenance to in a in shop parts of of moneymakers extremely result To and means to cost is inflation shop up. freighter life and engine these availability convertible. point projected that go which aircraft the visit tight inspections regulatory major the of which as visits, labor, fifth, mandated is primarily parts directives; replacement next years. CFMXX-XB/XB extension the independent a fourth, engine the of for double over XXX, cost XXX values results increase XXX the and capacity XX engines reliable being supply and Third, and And due proven

good to the we and our of feel approach leasing We value market the everything own. about continue engine to

largest and world. quarter XXXX one, the commercial increased from applying more organization savings on repair these in new maintenance reaching millions are products engine results module in highs of better with practices tens and year are of sourcing swaps MRO We in repair unique two, unlevered one power, power. in market to quarter our this sustainable volume we provides produced seeing of our our our portfolio engine our of a and that the financial and and EBITDA these ROE yields managing buying And and competitive reason every and financials using has have flow. advantage parts profitability, convinced attractive respectively engines; Applying by deal dollars, I maintenance become us extremely third, between practices and returns strategies; this an why buying actively XX.X% XX.X% basis. And

XXXX perfect have our further commercial the we of beginning have to continuation is come. first repair its advanced continue and joint expect improvements we and these While venture products words, best to to this we see engine to our available. when In expect other a in engine XXXX, yet in fleet, utilize growing products over will trend

more offshore, vessel, to our we into the XXXX, positioning in Pride, in its on over advanced intervention recent of currently and and now and maintenance. Turning Singapore completed supplied last repair discussed quarter’s in it's a most as process vessel of well market. construction May we less the call, in profitable project undergoing are The shipyard

for and the time yard using the prepare and repair undertake vessel’s for intervention. modifications We in well to are

results this work being Pride, will of asset. done result on XXXX the a reflect our the lower utilization As on

took point asset, and Jefferson, the details the XX% into of we going such operating to before Jefferson, as in losses. now want I of quarter this of that out now Turning the XX% own

had quarter, will we reasons. QX of turns for positive Canadian profits. positive, One, feel we we However, several which when three crude Jefferson our have will good in going of September, Jefferson be will rail in this in expect the one taking year of all We QX. months we only by business in occur this month about whereas QX XX%

XXXX. complete expect in is average and per barrels to downtime Second, construction, refined we a QX, had scheduled in necessary to and due expect we day XX,XXX starting to day QX products in handle XX,XXX barrels which of now

$XXX,XXX, Third, seasonality there it finally totaling the one-time our is QX which QX in charges were QX like is best in approximately up ethanol looks will and business, it the ever. usually be quarter in ramping ethanol slow of and

and is Jefferson. in very like X Pipeline reached WTI is are in Those ago increase quarter. WTS be quarters $XX business [indiscernible] Now ago spreads barrel. let fact excess a train capacity, month of about more while becoming by Canada operating rail to around, more $XX capacity are highlights capacity trains that for per a capacity, crude railcar comes two terminals when they the spreads and acute Jefferson we by this to issues versus a me and years expect talk When we X this now time barrel, as another Crude production which to online. even is attractive able at choices better. later good and two made in secured

what flexible rail a today and location refined to the ability ethanol, recent expected us products not perfect what happening Jefferson’s asset for did as logistics years is with give opportunity that be rail in we pipeline, least now. and the important exploit connectivity such next rail to crude the longer. be exactly is Trans by is it X the asset to and And is Mountain Canadian While to crude of by of cancellation X part at crude the the an the if

two with points. Jefferson on conclude me Let

First, the not strategic drivers position macro be better. and could

producing strong crude and refiners plants excellent by at significantly with all operations years. positive BN also America one major forward. multiple the and in products world, be and regarded from rail And one a discount crude over several which crude going is we terminals prime the the supplies having activity, economic North are Gulf Jefferson in in in regions, profit by in as end-markets and ramp-up from KCS, and will Jefferson to the in QX, constraints state-of-the-art connectivity growing Canada, North with rail will the the largest coming pipeline the climate of in proximity in experiencing UP grow EBITDA Jefferson markets by including to refinery top produce With With equipment. now and America. of rail Second, to related location driver expect widely access the a the

transshipment expansions the growth region drive such, needed and will in multiple volume. for As capacity storage

in most of by capabilities the three the be in markets offer comprehensive Mexico in to this and to by arrange December. begin driven to of didn't to products crude and compete we rail, positioned the water, will see number array refined QX XXXX in Additional until best financials, for four but some where growth by one of up pipeline the in six can effectively trains of We began to have that full North logistics hopefully expect is business. and lastly, by with and such America. to Jefferson and will exports ramp September And of we crude outbound trains well rail inbound beginning connectivity this by we exceptionally all exports

third and for begun we Furthermore In advantage volume storage the additional addition, have crude through barrels in multiyear the take ever storage additional have than perfect In significant of come tanks parties recently term. strong QX contracts will based at XXX,XXX to bring an this in XXXX, will construction more that perfect we executed at we have million we December when online online throughput barrels. these committed macros. time Jefferson location am will year. will in asset construction year-end meaningful the and a the growth to control currently for on And under perfect which precisely total on the refinery XXXX, million expect capacity, short, of we which I to to which local of convinced X.X terminal of handle November a come shortly barrels X over

X.X% Central, Turning in had at for job. we due railroad or his haul to primarily The quarter, have now to a a year-over-year Maine will perform slight and Total fourth a charge Ratledge done and Quebec volumes. expenses the quarter, We Ryan team car continues however above terrific did to the increased increased railroad. expectations. line our see revenue operational ramp-up for operation, one-time cleaning be decrease derailment. this which EBITDA the due and to

high very CMQR not continue additional that its we found line due improve, we continues prospects to have any to short the and perform prices. like well While to acquisitions

unable increasingly grow through likely our we that to such, will XXXX. in we if that As is alternatives acquisitions, elevate it are business

currently time now. Turning exactly was be The on XXX% December this this dock year. is cavern is business to construction will our functioning delivered is butane of This we in full utilized on first planned. of season operations and budget planned as and Repauno and as and the

Europe direct is the of solution need, the have to This We and to are ship liquids now with to started completing the for late engineering operation negotiations the a exists of multiple gas natural to butane propane regarding parties interim acute to the rail today. direct and commence we which XXXX. shipment result

in prior take that to to should availability in investment. XXXX fixed way $XX EBITDA off million generate XXXX million operate for and with additional having approximately We additional storage million $XX to annual this cavern expect agreements $XX a

business Ridge, our to frac Long to exceed at the Moving Long continues sand expectations. Ridge

We to XXXX, to and have and already $X year million and we EBITDA million contribute this about processed XXX,XXX $X sand sand tons $X million this expect frac year frac of year. next of

close plant, agreements executed, PPAs MW negotiated financing. are with are XX that the and the the now investment-grade duration power a years purchase fully we in be the the power to have we to and will of XXX% counterparties of These Turning plant. to and locked PPA are all to X in output needed be they power when XXX ready cover

close million of quarter. debt, which to the finalizing expect $XXX non-recourse terms are approximately we of this the We

With a sale line XXXX. are And project planned XX% power in is PPAs had QX hoped. the as the plant together and coming interest looking for targeting financing good we we the plant of the the as of bottom is

While there. to we own talk of which own of the continue expect both me XXX% plant, sand NGLs terminal, to gas will natural XX% we operation. and the up of frac XXX% liquids, sell to now NGL, the will about we And let power means the

the working contracts. we managing are Jersey our the supply which supplies fractionators, be We and terminal to and in more aggregate under off from long-term chain, destined loaded ships take Europe of of capture local arranging railed onto more intend will Repauna, for By economics. to to New

Jefferson, of to strong Ridge and positioned capabilities Europe. we perfectly is two growth with that case Repauno take terms demand in have in As location the assets Long are from both and advantage of

our and in expectations. our believe unique outperform value-added to becomes I more So And quarter. volume return conclusion, aviation and further both continues offering every

than growth that and will comfortable EBITDA ROE a return. be while feel XX% a I able we unlevered business come such averaging many As better to to for this years XX%

I As long of beyond, turn begin in growth With to to more have projects accelerated better QX business lead-time should realize has that their as EBITDA infrastructure you in call of to our see than our back the our prospects. and short, this that positive rate indicates felt potential. XXXX territory I and about never call, everything turning see we these of state optimistic In will the current about Alan. positive entered with infrastructure ever expect EBITDA and

Alan Andreini

you to Operator, the you Thank Joe. may open now call Q&A.

Operator

Stephens. [Operator Instructions] Your first question comes from Justin Long with

Your line open. is

Justin Long

Thanks. quarter. and morning Good congrats the on

see really So results from to we're aviation. continuing strong

wanted your So and size longer this a targeting what see you for progressing term. are thoughts on how target segment is the I get business, What of you optimal this to updated you profitability? for reasonable see do

Joe Adams

look engines of over years you today opportunity Today, the aircraft are at market on tends are investment XXXs to most that itself before, manufacturers. said or say older, from today we those like those can engines volumes, about the just I there's engines. in Well ways to to as XX,XXX target years. And would AXXXs the the the about and but that to are you other that budget words, by engines about XX that aftermarket, are about of XX,XXX give the XX I’ve overall market going market don't is XX,XXX be not in grow I on it. the think serviced and if a bigger. is I next original That equipment couple And engines our

and up. now to every So is shop and grow go visits year, it's a of huge going going it's cost to market the

is as what doing invest that. return and -- to on that number our originally alone, because And it's expected. return keep right mentioned, quite we're is adjusted bit we profile going very market a want we're relevant precise I'm to to exceeding opportunity we're of driven. than I'd don't so my our our like belief again, returns I But asset is I profile now, bigger not side the So a say

which other we think think just to deliver really of I of started savings surface per we products, $X our scratch can The the is portfolio that we've $X to thing on begun visit, million airlines figure looking like to how an other to we've just try to and maintenance for in to solutions to parties out desperately others who shop that costs. are market increase million

benefits able and we'll And to believe, approach be based our we really non-asset to working that so some is market hadn't business. grow which and to savings about, partnering thought we the a or of airlines share of our that component previously the with

And whole opportunity were to area we just capitalize a of could we think that's on. realize so that I beginning new

that of actually bit the bigger think two a have the is year opportunity a said I than growth So quite I for would those ago.

Justin Long

wondering flows you And you I opportunity closer secondly, could the like since EBITDA the you power that materializing, could about sell around stake but the it opportunity the helpful. briefly, you That's ownership what retain. Okay. help plant review XX% getting of the the talked eventually about on numbers to us percentage that and going just if minority was some you're we're based think to looks as capital

Joe Adams

Sure.

So structure of good We've do the most and we terms have of pretty the negotiated contract. visibility. the

produce XX comparable the an probably if look that of power expect you multiple XXX million And space unrealistic between annual we transactions not EBITDA. in at plant the cases in and million XXX some using assumption. a higher So will completed is

when to years so out out. half it $X. that's plant and total see billion a XXXX, a could deliver call billion, ready $X.X of is you X So in the to value two that's

million you if value $XXX would $XXX money in debt $XXX million discount million equity factor million half you we and could be the to it that of And first year, worth equity. be for to would to and So $XXX that thus had could you of that. that be think of the $XXX this on XX% it value if back that million of quarter worth time

we that there's in power plant. economics, nice So very upside and think again,

we increase multiple we the profitability So to the think users given substitute could of think to and ability but should potentially -- and have going but into tenant, the on-site well and that, all terminal. we're money to We'll a on half we higher upside get we'll our I taken about of paid for out there that we could have see. whole see own whole it, as be the still of we'll the

Justin Long

Okay. time Great. Very today. I helpful. the appreciate

Joe Adams

Thanks.

Operator

you. Thank

Wetherbee question with next from Your comes Citi. Chris

is line open. Your

Christian Wetherbee

wanted a Good by guys. on and I bit Jefferson, rail to start Thanks. morning Hey. on the maybe crude touch economic. little

So maybe two questions.

crude First, got I evolved to sort I'm given public economics full of only back deal give how for materially of you -- during XXXX/XXXX. those are sort of can so you contemplate blown out run for the perspective? sort of of maybe the a like how came month know new for levels going about used wave rate us pronounced has changed a pretty the that maybe sense you what looks quarter economics have spreads first to has see at crude you when what then appropriate at rail of that, Jefferson, curious run and to this meaningful Jefferson spreads from guys by certainly And by rate and in revenue if of evolved around point rail we're a the some think business you as we of sort

Joe Adams

Yes.

do. basically the the on where two and the is then with so rail, business work we what arrange sales that entire simultaneously Canada I there's and Gulf. One we have. mean, of by in in the we logistics they we chain execute producers is think do actually crude I types

the is you unload we the somebody a So the a point to and you which quite of widening, than a business a fixed traditional out we barrel charge better owns. economics else which where that other capture a price bit terminal of do, given really can it's spread more as piece bigger much crude relationship per

in by supply both whole arrange more the profitable the did why those. do fourth trains far and only And, but I So mentioned in where three that's business the September. of is chain, we we'll quarter, we

and on and We -- November, do we're don't I hopefully quite four that. good, think expect -- a December say revenues then quite -- we're it's year. detail And all on just will in next not it's at yet six positive really I going to that. But development. of that's the into moment but forecasting the that's by I It's evolution

Christian Wetherbee

to spread of fair given benefit it's is the to But that there the can accrue Okay. some spreads Jefferson? say that

Joe Adams

Absolutely.

Christian Wetherbee

comments I Okay. Got loadings. wanted NGL it. your to around on follow up the

I maybe like if of seems Repauno, opportunity you long wanted see what think, could it to just perspective of from I assets. that it’s little it like interesting to considered bit expand could volume it your a business two an a captured between ridge looks on become? sort what

Joe Adams

Sure.

from pipeline I world you fits they found of Gulf that there's the or its primarily these Middle ship and rail come from to demand So there's getting on them have tremendous Mexico as East has the looking other East for East and the Europe that's mentioned, online, terminal, from number we're in is, and starts one around of only we amount option and and sources [ph] propane, a XXXX. starting that line. market Coast loading the with And PDH from Mariner started is look from are can supply what looking sub directly source of a had up that the and when they're for plants from

in first shorter, it and or world, the so the cheaper East closer, propane which all Marcellus you through the and Coast, sources you through if And one either East is the want the is cheapest and longer the you Marcellus go Gulf, to of propane of get cheapest, of slower. so get which Coast, is the

they're very if also. we we and to demand the therefore these see when bigger strong -- contracts of and term portion be arrange are and able capture long to cheaper, is the and full meant again plants we should chain supply built, run. for faster like This we constructed So economics

diversification people of need and supply need supply. they So

term long good for fit So contract. it's a very

And day we'll the – of XXXX, and train be million of we So million XX available, unit to EBITDA we the XX and but then XXXX can we cavern. the use work engineering sort word, caverns what's to storage larger before two we're of underground availability a optimistic probably in years. about previously, very at geological max, We've right and that. as could looking of that have done the that those in mentioned a generate volumes know income granite

have said XXXX, we of to of significantly allow increase of which previously, the we us million XXX and barrels in roughly So storage, barrels X as million expect millions throughput will to of storage produce should EBITDA.

that's the business which of we that So feel about. pretty of trajectory kind good

Christian Wetherbee

very helpful. Okay, last one if let you that's one Then me.

On the that of opportunity assets forward. that's rail CMQR, best like move acquiring the you the is generally feels I side guess is an maybe been in potentially you've process

Let's capital [Indiscernible] infrastructure? to just that that that or cash, the capital it tend the just to would assuming strong happen. is really yields that infrastructure -- does an primarily really, to stay, are sort aviation, with out play to tend of put work, the the because stay there

Joe Adams

mean, that Repauno might if be cash I No. I as we that mentioned in interest we we'd could generating sell we I infrastructure. think half from also do sell

and debt. So, can think project at with financed expansions I XXX% we the Repauno

equity see into don't big more need It for aviation. I infrastructure. would a likely of So go

Christian Wetherbee

time Okay. Thanks I it. helpful. That's appreciate this for the morning.

Joe Adams

Yes.

Operator

Thank you.

Securities. Ryan Devin from comes JMP with question next Your

open. is line Your

Devin Ryan

and XX% already kind love just just there I perspective about that increase given the would capacity morning to potential Good on second of the that, fantastic it negotiated some part you maybe the that sale is up perspective just of congratulations sensing Are And of question buyers? then a think Great. the demand those first around output? around value. Long and really conversations And this trying of on then are kind for when the we've appreciate all given financial be the you to strategic output with My on buyers any of to would before. or respect then, Ridge, know interest about spoken where I you've occurring the quarter. process that? around and the already negotiations

Joe Adams

there's invest that So popular infrastructure. power a of people It's in plants category. lot infrastructure a

buyers. pretty a foreign. It's both of there's So and ready domestic market

activity. you detailed preliminary to it's not have until have universe. everything we've It's up, relatively So conversations. a And buttoned it's but fruitful not a had known and signed, and more you're pioneering really conversations,

of the closed hands not sort the the this on to this counterparties could we're we equity think all about quarter and and we're we'll process have, what to side. will uneducated deck then But its So get be thing be. turn we

Devin Ryan

it. Got

outline Okay you a that's given very perspective, that on macros bigger calls on that lot mean, kind of development. and and and accelerate a Canada been if kind I based accelerate kind the of just a can air you moving an opportunity recent excited the on And then just broader your just helpful. being lot what's be mean how you what of walk a of just the and just walked will how the developed can just of in if been? in there's have asset you balls of I Jefferson, picture I that a that of some in macros evolve. positive through I'm timeline that that's things know, the from kind is should everything there about. to curious, through with of favor we've maybe accelerate going macro around

Joe Adams

We refineries One exporters, limited. to them we customers we dock when take of can advantage is with Gulf on and certainly and for area in the opportunity present is an engaged thing pretty space certainly the we're and that.

these all six lead months, its are XX deep water have we And always time. second construction we've the almost of months almost on dock. to nine So, items started

development But offering. for So, complete the space plans got where permitting the yes, asset. and the it's is present we deep as additional you the engineering very storage, have have And you're to can we big really that dock in do a before all available in pipeline the as advance the a We've well land, water also docks. we're work doing capacity, two ready.

saying So, we've be the go a otherwise things accelerate to important little the bit dismissive able come done we're it's I can the list out. work to tend prepared. if the if open? think yes circumstances and of we if got will people right Is are in to meetings you've be and a And to that ready accelerate we situation long

Devin Ryan

got great. okay it, Yes,

here Just just in aviation, just one for last quick our models.

over On I to the a be of the thinking? we next a you us engine just utilization I we're thinking and side. parts have know could rates, as both particularly there's but been kind the rate macros sides about. moving year of on thinking lot be should how so quite about good just utilization good there on remind the guess,

Joe Adams

always to the XX% targeted high with we've will end XX% is acquisitions. mean, of that it good which and I fluctuate but range at we're

acquire a it function to many to this many also side, takes numbers some engines shops large the in it of engines of that time how we utilization. shop. if are a in the is put and are number how In the are So, quarter, sensitive the out not

to a So, that we're so that the it say point-of-view from not keyed was really be returns to driver. into not it's big

thing. engines good that's So, main have we want have and really at the a price availability. And to good

Devin Ryan

Yes, fine.

Joe Adams

the XXs. should And the in be aircraft

so much. You matter doesn't sitting you don’t them aircraft shouldn’t maintenance, -- want as have it time-based around; engines

hours with engine. it of and no available. there it an comes on you If time-based a a There's stays warehouse number in engine for out cycles an put months, maintenance three in same

Devin Ryan

Understood, great. I now Well, thank questions. my appreciate Joe, taking you, you

Joe Adams

Thanks.

Operator

Thank you.

Your with Barclays. next Oglenski from question Brandon comes

is line open. Your

Unidentified Analyst

taking This Nathan question. for is for Brandon. my actually Thanks

and rail crude be to can crude the a Jefferson something more stable at that things Is volatile of kind term do at and obtaining some contracts. rail. going of rails toward moved times and have potentially and by by deals Jefferson multi-year longer rail you on crude could forward? quick Just question keep Since

Joe Adams

current is We Yes. the all much how in for also the it. us been period. that like time lock multi-year that focused we available opportunity to now thinking very we we're but do very on that's about we're a And

in And think from that be lot rail also has going I will so, is that's on focus where going regions there Canada, natural -- And we're something a to that XXXX. advantage. be could be it other a to

that. assets trying the we terminal are one maximize great that's our of So, and and leverage and to at we're

Unidentified Analyst

has profitability follow-up in another a sounds nature. improved. And lot of it Okay, great. quick structural your the And are improvements aviation, then like on

puts we really forward is fair could level it further? but profitability given of improve assume to and other it So, and this could assume takes that going

Joe Adams

to trend improved the quarter it's I that going be but good. think is wouldn’t every I line that promise

directionally I can but I'd we're say hesitate so. every you to the right way do quarter think that So, trending this, expect

Unidentified Analyst

fair. that's Okay, Thank That's I all you. got.

Joe Adams

Thanks.

Operator

Thank you.

Bank Your Merrill America with comes Lynch. Ariel Rosa of next question from

Your line is open.

Ariel Rosa

morning, good Hey guys.

congrats off, here. on momentum all First the

thoughts out, start it. outlook dividend has what's raising nobody me or What the for are it's asked XXXX? Let in the the else

Scott Christopher

we expect last one last between call So, QX year. achieve two said next quarter covers year this to we to and QX of --

And so, maintain would I that.

there I probability think to we'll QX from then and it's probably XXXX dividend. when look in of most be as would that raise hit highest we to the

Ariel Rosa

couple mean coverage, certainty. I mean pretty hit as you high if sounded it was times two like But of I think Okay. I that years, a it

Is to kind to that So, there? start obviously gun but to certain move mean the of or fair expect pretty up. that nothing I is I like it's jumping sounds reasonable am it XXXX

Scott Christopher

No. think it's and fair. I

Ariel Rosa

terrific. you're kind space. where Wanted continues down aviation the capital at? then think about question. of in with terms start XXXX of that to the rate Okay, work are you asset slow and you of pace in or which adding terrific exposure in putting ask was XXXX at* to pace And Does there, to that do kind a second obviously gear it

Scott Christopher

bigger. Well, as opportunity mentioned the I opportunity and I think the earlier, growth is

that return because side the very the two end even investment But we'll so opportunity you'll tango. larger, it But but up takes number it's on budget to to hard that promise hopeful every said, I the hit doing So, think can't find deals more. profile. the I is same year of I'm

Ariel Rosa

tell? bit question in And of of Joe. Has for the raise maybe you are partner all at then fair. kind some people, to questions. is or a out just a seen that early still the dialogue little We've with too it of height me, impacted Okay, market volatility or is that is in of recently the to conditions availability nature like and starting when have it seems conversations last couple and go that capital changing the of geographies and

Joe Adams

lot which market more of is is private like money. markets. capital volatility I than stock And a of still mean markets haven’t much volatile the decline because the the abundant over God still seen I have cash, Private in public "No. seems from thank observations, people the with but would I are private say; market Octobers flush it any my supply.

Ariel Rosa

Okay, terrific, the Thanks sounds time. for good.

Joe Adams

Yes.

Operator

you. Thank

Your next question comes from Robert Dodd with Raymond James.

Your line is open.

Robert Dodd

EBITDA alone in on aviation Hi, in It fourth with FAD cetera. is pace the growth If quarter on The from me wrong into dividend XX.X. run something the to you and some the et that and fourth adds the with have signed normalized corner, that NOI's go quarter, coverage you'd the guys. not the XX. quarter. infrastructure that to in Joe, looks back to of to double In would breakeven numbers. hit for attempt you've the FAD is a Obviously rate

for board I when probably. process is I you dividend. in QX and lag mean, for So, Xx is the a then or think expect with QX board the hit that for you a obviously to this I on if just of the put up? deciding and What realize decision going sure, conservatism would little is bit a change

Joe Adams

don’t yet. know I

think drive a forward-looking be to of what I going it. combination it's really -- at think we'll is I looking we'll

ahead look you'll and how you prospects. about do backlog the you say feel So, the and

single So, a I just be would would that bigger factor think than the math.

Robert Dodd

Got it. I appreciate that.

selling at of follow-up. maybe that's leads million 'XX. XX% So, kind question, some to a with also long in XXX into of point your the potentially capital. kind potential million which next XXX that of Obviously CMQR of

you You'd maybe could block with done if that also offshore the has find discussed on on be additional acquisitions. repurposing, its prior the that after can't calls maybe pride

million to reinvested think all of $XXX that to to That large returns there. its could potentially obviously shown capital in ability could So, coming in $XXX be has the in the be self-fund million get But back a I ways. lot degree a business. up to That's aviation, aviation.

coming existing a capital you make if equity what's be capped initiative. on in, could that's need if if new you -- obviously do but maybe negative calculus initially project, amount the the of add new new that starting the with the And ones start something on with other calculus got projects to do a point a don’t infrastructure what's to So, your large do, to you additional you so you that, well. maybe going do potential the initiative

balance there? what's So, the

Joe Adams

good returns we've think in market. with low as They're of any do Its pretty see good repurposing these sort And application and idea had up brownfield the it had experience costs, an a I both quite and to opportunity. very of as is always niche acquisition bit are has Ridge Long we've threw really driven and been some been and the I of Repauno examples. think nobody come I with a them what good really process investment sites of we've a

see more not have that really first. anything I from potential up yet, execution focused lined the of I So, I'm saying we we're but wouldn’t on

but that which of have could we after So, themselves some opportunity milestones. I that's see an of things present achieved these

other to to invest or So, out the like just we give don’t what not to return, something we back figure we invest how if see something. money going than we'll it that, it. that We're give

Robert Dodd

I it. it, thank appreciate Got you.

Joe Adams

Yes.

Operator

from Research. question with you. Your Wolfe Salmon Robert Thank comes next [Operator Instructions]

Your line open. is

Robert Salmon

guys. morning good Hey,

Joe Adams

morning. Good

Robert Salmon

as aircraft impact I'm But helpful an not of of to gear some have thinking the changes you models trying in accounting there's any of of next we will impact first really sort the how age we're for I that in The you the just 'XX. should preliminary talk and much on regarding are potential increased aviation And assets thoughts sure our maintenance. terms the differed kind us coming effect how curious have about lease been of question given kind be into that is your kind for will of of being we're have. year. of engine be

Joe Adams

think it any us. We impact has on don’t

monitoring been but been doing that doing for be my group analysts years. have to would it in ratio primary be adjusted XX anyway. obligations airlines been they'd and balance formally capitalizing put experience, impacted have on airlines, airline lease rent would we've the leverage put the as But So, that They've sheet. and

that a so, extremely you and an financing intensive the high XXX% is benefit capital And get big airlines for really business. on

leasing and in we So, impact and financials. decrease think any I on don’t our don’t see interest airlines has see, from it we don’t any

Robert Salmon

Okay, yes. you maintenance more question not mover sounds and is like recognition it for terms the of it's at My P&L needle but a revenue the differed guys? really geared in

Joe Adams

monitoring and we see anything. been we've don’t No,

Robert Salmon

right of that just currently with here we're non-recourse regard about the $XXX have And to million, looking model. as an question equity you the this then, so coverage we're debt give Joe, how has, kind terms of portfolio. to of my in including kind us is follow-up at Can debt the update thinking much

Joe Adams

Right now, we counted all add. basically as sheet balance

sort non-recourse of be the would exclude The we first that Long financing. debt Ridge would

Robert Salmon

that's so Okay, Thanks, helpful. much.

Joe Adams

Yes.

Operator

closing turn showing Thank call no like you. further And questions this remarks. back to I'm over at to I'd time. Alan for the Andreini

Alan Andreini

for Thank conference to you today's operator. participating thank you, you And forward after look QX. in all call. We updating

Operator

in you does you thank may conclude participating day! a conference. all the and disconnect. Everyone and This gentlemen, Ladies today's wonderful program have for